Special Bd. of Aldermen — 5/2/17 Page 8
component of the project fairly soon. Then, equally important, is the effort to form a capital campaign in order
to take on the challenge of raising the endowment to sustain it. That occurs later in 2017. A campaign
consultant is hired, they do their research and then initiate the campaign in the middle part of 2018 so enough
of the chunk of funding is placed so you and the community is comfortable with proceeding with the issuing of
bonds. Knowing that endowment is in place should give you the confidence that the bonds can be supported.
Also as a final step there’s some work being done to get a naming gift, an additional financial benefit.
The element of the financing that | had not included in this budget is | did not put the retail income associated
with the ground floor in the budget. It’s a little premature to do that. That's another arrow in your quiver
potentially available to help service the debt associated with the project.
Director Cummings
Thank you, Duncan. Mr. President, the reason why we are here tonight is | wanted to make sure we had a
very clear understanding in terms of the expectations and commitments that would be needed by both the city
and the private sector to be able to move this project forward. The very elementary next steps is we would
need to have some upfront funding for seed capital which would be money to help us procure a capital
campaign consultant to help us do some elementary design and physical planning. That would ultimately help
us move toward that endowment type of programming in that $4 million range. Ultimately the city needs to
understand that they have to be comfortable to achieve the type of programming that was outline tonight a
$15.5 million bonding request and the debt service should nto be expected to be paid back. If you wanted to
go in the direction of the preferred alternative building, which would be the recommendation of this group, you
are looking at the Alec’s Shoe building. It is privately owned. We had very positive conversations with the
current owner. He is willing to enter into an option. We would need to have that conversation with him sooner
rather than later because he obviously wouldn’t want to hold up his private sector plans indefinitely. We would
need to put some sort of payment to him monthly that would get credited to the final payment to him if we were
to move forward. That’s all be discussed in advance in some sort of understanding so we would have a clear
land acquisition cost in the pro-forma. Those are the immediate issues.
What I’m hoping to gain from you tonight, Mr. President and to the body, is some direction and some
understanding as to what the city would like to do so we can move this conversation forward in terms of
planning for the next steps.
Alderman Siegel
| have quite a few questions and comments. The $15.5 million, | assume this does not include the purchase of
the building. Is that correct?
Director Cummings
It does.
Alderman Siegel
You have an idea then of what the building would cost?
Director Cummings
Correct.
